After decades of offshoring manufacturing to save on labour, the vulnerabilities of relying on overseas production have become increasingly clear. Along with a rise in cyberattacks and ongoing trade wars, Canadian manufacturers have also seen how even slight disruptions can have an outsized impact on just-in-time production. And when the pandemic hit last spring, as borders and factories closed, manufacturers reached a breaking point.
As jurisdictions raced to secure limited supplies of personal protective equipment (PPE), an ugly nationalism set in — by April 2020, 69 countries had banned or restricted the export of many types of medical supplies. “We’ve learned the hard lesson that relying on global supply chains for critical products is a problem,” says Jeremy Hedges, president of Waterloo-based medical supply manufacturer the Canadian Shield.
The massive shortage of PPE caused by delays on overseas orders prompted Hedges to found the company to produce face shields and medical masks locally. Within three short months, the company grew from 10 to 150 employees. “It felt like we were the back end of the COVID war effort,” says Hedges. “We were getting calls from hospitals that were days away from running out of face shields or protective gear.”
He would be on the other end of tear-soaked calls from purchasers who couldn’t get masks or had their shipments stolen. “It was an all-out brawl for supply back then.”
The pandemic highlighted how high the stakes are in relying on far-flung manufacturers for vital products — reliable access to PPE and vaccines, for instance, can literally save lives. Bringing manufacturing back to Canada, referred to as nearshoring or reshoring, also creates a more predictable flow of in-demand goods with more resilient supply chains. But it has several advantages that will outlast the pandemic: local jobs, shorter delivery times, reliable quality and a smaller carbon footprint.Ontario is Canada’s traditional centre of manufacturing, but the sector has been greatly affected by global trends, shedding some 250,000 jobs since the 2008 recession. But advanced manufacturing, which uses innovative technology to make complex products like medical devices and airplane parts, has been driving a new trend in Ontario. Since 2010, it’s accounted for more than half of the 45,000 jobs created in the sector, according to an analysis by the Innovation Economy Council.This, in conjunction with the shock that supply chains experienced during the pandemic, has the potential to bring back a wave of manufacturing to the province. There’s already growth in auto parts, aerospace and medical equipment manufacturing, according to the council.
Chris Labelle, co-founder of 3D printer maker Mosaic Manufacturing, has been championing reshoring for the last seven years, based on what he’s seeing in the market. “Companies were experiencing really long lead times: you send an order out to China, they have to make the part, they have to package the part, they have to ship it to you,” says Labelle, who is also COO of the Toronto firm. “There’s just so much waste and so much inefficiency in that process.”